(AsiaGameHub) –   Malta’s legal defense of its gaming framework and licensing system has suffered another setback following a ruling from the European Court of Justice (ECJ), which backed the interpretation that EU member states may restrict online gambling services from operators licensed in other member states without violating EU law.

This case forms part of a broader dispute between German authorities and Malta-based gambling operators, including subsidiaries of Lottoland, centered on the enforcement of national gambling restrictions versus EU “freedom to provide services” principles. The ECJ’s preliminary ruling confirmed that countries such as Germany can keep bans on online slot machines and certain lottery betting products, and that players may also pursue damages against operators that were unlicensed or operating in violation of national rules.

The conflict originates from long-running disagreements over whether licenses issued by the Maltese Gaming Authority (MGA) should allow operators to offer services across the EU under the Treaty on the Functioning of the European Union (TFEU), which guarantees freedom of services within the bloc.

Germany’s previously fragmented regulatory system was ultimately replaced by the Interstate Treaty on Gambling, which took effect in July 2021 after years of negotiations between the country’s federal states. The reform introduced a formal licensing framework for online gambling, but disputes remain over activity that took place before regulation was fully established.

Malta has consistently maintained that MGA-licensed operators acted lawfully under EU internal market rules during periods when Germany’s regulatory system was inconsistent or incomplete.

Core Cases and Operators Involved

The ECJ ruling is partially tied to disputes involving Malta-based companies such as Tipico and Lottoland, which operated in Germany (and in some cases Austria) during the late 2010s and early 2020s without valid local licenses at the time.

A number of cases involve customers seeking compensation for losses incurred between 2013 and 2021. In Tipico’s case, the operator later obtained a German license after Germany re-regulated its gambling market in 2021, but had operated without one prior to that. Lottoland is also facing claims linked to its earlier activity before stricter enforcement regimes were fully put in place.

While the ruling directly concerns the Lottoland-related proceedings, it is expected to shape other ongoing disputes involving Malta-based operators and cross-border enforcement actions.

The ECJ stated that Article 56 TFEU “must be interpreted as not precluding national legislation which imposes a prohibition on the organization of online casino games, in particular slot machines, and of forms of betting such as online betting on the results of lottery draws.”

Implications for Malta’s Legal Stance

The decision undermines Malta’s long-standing argument that EU freedom of services protections should override restrictive gambling regimes in other member states when operators hold an MGA licence.

Malta has structured much of its regulatory approach around this interpretation, particularly through its controversial “Bill 55” framework, formally an amendment to its Gambling Act introduced in 2023.

Bill 55 grants Maltese courts the authority to refuse enforcement of foreign judgments against Malta-licensed gambling companies when those rulings conflict with Maltese law. The policy was designed to protect the country’s iGaming sector, which accounts for an estimated 10% of Malta’s GDP, from a growing volume of cross-border lawsuits.

Malta argues that this safeguard is necessary to prevent a surge in foreign claims and to ensure stability for operators licensed under its jurisdiction. Critics, however, view it as a mechanism that limits the effectiveness of judicial decisions from other EU member states.

The ECJ ruling does not fully resolve the wider legal conflict between Malta and other EU jurisdictions, but it strengthens the position of national regulators like Germany in enforcing local gambling laws against offshore-licensed operators.

As legal disputes continue across multiple jurisdictions, Malta’s status as a major iGaming hub remains under scrutiny, particularly as other regions including Estonia and the United Arab Emirates seek to attract gambling operators with competing regulatory frameworks.